Impact of Federal FY24 and Proposed FY25 Funding on Serious Illness

In March 2024, the twelve FY24 appropriations bills were passed in two separate pieces of legislation. When combining the two packages, discretionary spending for the budget year comes to about $1.66 trillion. That does not include most program costs for Social Security and Medicare or financing the debt.

The appropriations package was constrained by the agreement that former Speaker of the House Kevin McCarthy and the White House agreed to in May 2023 as part of the debt ceiling deal (Fiscal Responsibility Act). The agreement keeps nondefense spending roughly flat in FY24, increases it by 1% for FY25, and suspends the debt limit until January 2025 (after the presidential election).

Included in the final FY24 appropriations was $12.5 million for palliative care research within the National Institute on Aging’s (NIA) funding. The Senate Report 118-84  by the Senate HELP Committee on the appropriations for NIA states, “The Committee provides $12,500,000 for NIA to implement a trans-Institute, multi-disease strategy to focus, expand, and intensify national research programs in palliative care. The National Institutes of Health (NIH) is directed to establish a comprehensive multi-Institute and multi-Center initiative aimed at a wide variety of palliative care research, training, dissemination, and implementation of projects to intensify the strategic coordination of palliative care research efforts.”

The final funding bill included increases for serious illness related research at the NIH. A total of $48.6 billion in discretionary funding was appropriated, representing an increase of $300 million over fiscal year 2023, which included: $100 million increase for Alzheimer’s disease research, $120 million increase for cancer research, $75 million increase for enhanced investments in mental health research, and $10 million increase for the National Institute on Minority Health and Health Disparities. Critically important supports and services provided under the Older Americans Act (OAA) were generally flat-funded with the exception of increases for the home-delivered and congregate meals programs ($40 million), and a small increase ($2 million) for caregiver supports.

The Fiscal Responsibility Act also affects the FY25 budget that President Biden sent to Congress just days after his State of the Union speech. His budget aims to lower costs for “hardworking families,” restore fairness to the tax system, and promote health equity, among other things. According to the Center for Budget and Policy Priorities, “Whether the 2025 non-defense appropriations cap, just 1 percent above the 2024 level (without accounting for inflation), is ultimately workable will no doubt be part of the 2025 appropriations debate once the dust settles on the 2024 process.”

The President proposed some increases for FY 2025, including total funding of $50.1 billion for the NIH, excluding the Advanced Research Projects Agency for Health (ARPA-H) which would receive $1.5 billion in discretionary budget authority. The proposed budget would also cap the annual Medicare out-of-pocket drug costs to $2,000 and limit monthly insulin costs to $35 for all Americans and would increase the number of drugs (used by 9 million beneficiaries) for which Medicare could negotiate.